The Kahunas Have Spoken: Franchise Trends Affecting Your Top and Bottom Lines in '06

The kahunas of the Blue MauMau franchise community have gathered to discuss the coming franchise trends that will impact your franchise’s revenues or costs in 2006 (Well, at least one kahuna, me, the down-syndrome pygmy hidden in back of the big guys). I’ve prepared for the gathering by following trends from many franchise and small business websites. That’s why, oh great chieftains and fellow franchise kahunas of Blue MauMau, I’m a few days late with projections for ‘06.

With web links in hand, I’ve chosen the best predictions by pointing to each site and uttering the magical words, “E-knee, Me-knee, My-knee, Moe.” After which, the big gods of DEMOGRAPHIC and MACRO-ECONOMIC trends that impact top-line long-term opportunities revealed their will from the clutter of data. This is what they said.

• The general population will retire in greater numbers as the edge of the baby boomers begin to leave work in two years. Demand for senior care to assist our old kahunas will be on the up rise. At the same time, many more old kahunas will spend more money to look young, eat healthier foods and desire to age gracefully. So, expect the fast food industry to see more people who purchase healthier foods while at the same time masses continue to want the really good fatty stuff. One word of caution from my fellow kahunas though – specific diets come and go, although we’ve heard that the all chocolate diet is really delicious.

• And where are the old migrating to? They and others are either multiplying or moving to the West or the Sunbelt. Nevada, Arizona, Utah, Florida and others will provide the strongest percentage growth in consumers for franchises there.

• Now more short term. Loan rates will rise in '06, dampening franchise, small start-up business and home purchases as a whole from the tremendous levels of 2005. (I guess I’d better act fast to buy that second franchise unit before rates go up further.) If you’re in a home related franchise such as home realty or design services, plan for a softening. Having said that, few economists believe the economic expansion is in serious jeopardy and predict roughly four more years of expansion; albeit slower ($$). Expect consumers in 2006 to buy less as their credit card companies implement significantly higher minimum payment requirements, effectively doubling it.

• 2005 was the year of frivolous too-many-burgers-make-me-fat, bogus finger-in-the-chili big chain lawsuits. Make sure your franchise system (ergo you) employ a good law and PR firm. At the right time (what I mean is at the worst time for your company), they are worth their weight in gold. With even Congress voting to protect the burger chains from fat law suits, a temporary signal to calm lawsuits down in the pursuit of franchise chain money in 2006 has been sent .

The kahunas gathered around one more time, pulled out some sort of Ouiji board gadget and divined what TECHNOLOGICAL changes we’d feel this year. These were the answers mysteriously written down out of thin air.

• In their quest for greater economies of scale, franchisors are finding that they can use space better, reducing real estate costs. Automation is also becoming cost effective. McDonald’s is testing automated labor-saving self-order kiosks. The bad news? Expect franchisors to up the system standards ante on new equipment that you need to buy during these good economic times.
• The web is growing local. It used to be that advertising was migrating to the Net in a big way on a nation-wide scale. Now eBay, Google, Yahoo and Yellow Pages are in a race this year to offer more and more local ad services with richer informational content, consumers will significantly shift to using the web to find your LOCAL competitors. Local businesses will advertise much more aggressively on the web. Even eBay has announced the launching of local classified ads for lube and car maintenance businesses in ’06 in a major way. Blogs (including podcasting and videocasting) will grow even faster with small businesses and a few franchises embracing such viral marketing and soft-sell methods.
• The good news is franchise owners will find it easier this year to look at their POS, data base and business files from home. Technology will allow life to get easier or at least to see your house and family a little more often – maybe even take a vacation. (By the way, if you’re in the market for a franchise, home-based franchises are firing up because of such new technologies.) The bad news is to expect more and angrier viruses and worms to attack your computer systems. Despite recent legislation, there still will be a lot of spam email too. Unfortunately, these modern curses will spread to pandemic levels at faster rates than ever. There are thieves everywhere and they want your data so protect it. (Don’t you want to wring the neck of those hacker teenagers with too much time on their hands?) For those out there who are innocent babes in the virus infested woods that have done or plan to do nothing, you and your customers have my deepest sympathy. Rubbing our magical jujube beads might thwart bad luck. That, or pay the few dollars for security software and an automatic data back-up system.

Such revelations into 2006 grows dim as the Gods grow weary of such mortal playing, especially with such a dim-witted kahuna in the midst. As we kahunas walk out of the grass hut into the reality of daylight, we all wonder if we’ve been given divine insight or are the victims of impish playing. Only the coming year will tell. In the meantime, I hope the rest of the kahunas in the Blue MauMau community will add their insights to give better clarity to what has been seen today.

Meanwhile, I'm grabbing an island burger. After such revelations, I’m hungry.